AOL Announces Close of $1.056 Billion Patent Transaction with
Microsoft

Reaffirms Commitment to Return 100% of Proceeds to Stockholders

June 15, 2012 03:01 PM Eastern Daylight Time

NEW YORK--(BUSINESS WIRE)--AOL, Inc. (NYSE: AOL), today announced that it has completed the
previously announced $1.056 billion patent transaction with Microsoft
Corporation (NASDAQ: MSFT) (“Microsoft”). The transaction includes the
sale of over 800 patents and their related patent applications, and
grants Microsoft a non-exclusive license to its retained patent
portfolio for aggregate proceeds of $1.056 billion in cash.

“The closing of this transaction represents another major step for AOL
in increasing value for our shareholders,” said Tim Armstrong, Chairman
and CEO. “As our track record has shown, you should expect us to
continue our momentum of creating and unlocking shareholder value
through continued operational improvements and executing on our
strategy.”

The close of the transaction with Microsoft, including the combined sale
and licensing agreement, clears the way for AOL to return more value to
its shareholders and highlights the AOL Board’s commitment to enhancing
value for shareholders. The close also enables AOL to continue to
aggressively execute on its strategy to create long-term shareholder
value.

As a part of the transaction AOL also received a license to the patents
being sold to Microsoft. AOL continues to hold a significant patent
portfolio of over 300 patents and patent applications spanning core and
strategic technologies, including advertising, search, content
generation/management, social networking, mapping, multimedia/streaming,
and security among others.

As previously announced, AOL is committed to returning 100% of the
patent proceeds to shareholders. AOL’s Board and management team are
currently working on determining the most efficient and expedient method
to return the proceeds of the patent transaction. AOL expects to provide
additional details to all shareholders by the end of this month.

About AOL

AOL Inc. (NYSE: AOL) is a brand company, committed to continuously
innovating, growing, and investing in brands and experiences that
inform, entertain, and connect the world. The home of a world-class
collection of premium brands, AOL creates original content that engages
audiences on a local and global scale. We help marketers connect with
these audiences through effective and engaging digital advertising
solutions.

This release may contain “forward-looking statements” within the meaning
of the federal securities laws, including statements concerning
anticipated future events and expectations that are not historical
facts. Words such as “anticipates,” “estimates,” “expects,” “projects,”
“forecasts,” “intends,” “plans,” “will,” “believes” and words and terms
of similar substance used in connection with any discussion of future
operating or financial performance identify forward-looking statements.
These forward-looking statements are based on management’s current
expectations and beliefs about future events. As with any projection or
forecast, they are inherently susceptible to uncertainty and changes in
circumstances. Except as required by law, we are under no obligation to,
and expressly disclaim any obligation to, update or alter any
forward-looking statements whether as a result of such changes, new
information, subsequent events or otherwise. Various factors could
adversely affect our operations, business or financial results in the
future and cause our actual results to differ materially from those
contained in the forward-looking statements, including those factors
discussed in detail in the “Risk Factors” section contained in our
Annual Report on Form 10-K for the year ended December 31, 2011 (the
“Annual Report”), filed with the Securities and Exchange Commission. In
addition, we operate a web services company in a highly competitive,
rapidly changing and consumer- and technology-driven industry. This
industry is affected by government regulation, economic, strategic,
political and social conditions, consumer response to new and existing
products and services, technological developments and, particularly in
view of new technologies, the continued ability to protect intellectual
property rights. Our actual results could differ materially from
management’s expectations because of changes in such factors. Achieving
our business and financial objectives, including growth in operations
and maintenance of a strong balance sheet and liquidity position, could
be adversely affected by the factors discussed or referenced under the
“Risk Factors” section contained in the Annual Report as well as, among
other things: 1) changes in our plans, strategies and intentions; 2)
continual decline in market valuations associated with our cash flows
and revenues; 3) the impact of significant acquisitions, dispositions
and other similar transactions; 4) our ability to attract and retain key
employees; 5) any negative unintended consequences of cost reductions,
restructuring actions or similar efforts, including with respect to any
associated savings, charges or other amounts; 6) market adoption of new
products and services; 7) the failure to meet earnings expectations; 8)
asset impairments; 9) decreased liquidity in the capital markets; 10)
our ability to access the capital markets for debt securities or bank
financings; 11) the impact of “cyber-warfare” or terrorist acts and
hostilities and 12) the approval of the patent transaction with
Microsoft Corporation by antitrust authorities and the satisfaction of
the other closing conditions to that transaction as well as factors that
could affect the manner, timing and amount of the return of any of the
sale proceeds to AOL shareholders including the need for AOL to retain
cash for its business or to satisfy liabilities.